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Alcoa (AA)
NYSE:AA
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Alcoa (AA) AI Stock Analysis

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AA

Alcoa

(NYSE:AA)

Rating:72Outperform
Price Target:
$34.00
▲(6.72%Upside)
Alcoa's strong valuation and recent corporate strategy to unlock shareholder value are significant positives. However, challenges in cash flow management and increased tariff costs present notable risks. The technical outlook is supportive, with positive momentum indicators.
Positive Factors
Cash Flow
Solid free cash flow generation this quarter with an optimal capital structure target in sight.
Financial Performance
Alcoa delivered slightly better-than-expected results, despite a challenging operating environment.
Tax Credits
The company will be receiving IRA production tax credits for aluminum production in the US of ~$50-60 million per year.
Negative Factors
Operational Challenges
Alcoa flagged a permitting delay for its Australia bauxite mines, adding to operational challenges.
Shipment Reduction
The restart process at San Ciprián smelter will result in a 150kt reduction to aluminum shipments.
Tariff Policy
Uncertainty amid abnormal volatility in alumina prices and the negative impact of new US tariff policy on aluminum.

Alcoa (AA) vs. SPDR S&P 500 ETF (SPY)

Alcoa Business Overview & Revenue Model

Company DescriptionAlcoa Corporation, together with its subsidiaries, produces and sells bauxite, alumina, and aluminum products in the United States, Spain, Australia, Iceland, Norway, Brazil, Canada, and internationally. The company operates through three segments: Bauxite, Alumina, and Aluminum. It engages in bauxite mining operations; and processes bauxite into alumina and sells it to customers who process it into industrial chemical products, as well as aluminum smelting and casting businesses. The company offers primary aluminum in the form of alloy ingot or value-add ingot to customers that produce products for the transportation, building and construction, packaging, wire, and other industrial markets. In addition, it owns hydro power plants that generates and sells electricity in the wholesale market to traders, large industrial consumers, distribution companies, and other generation companies. The company was formerly known as Alcoa Upstream Corporation and changed its name to Alcoa Corporation in October 2016. The company was founded in 1888 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyAlcoa makes money primarily through the production and sale of bauxite, alumina, and aluminum products. The company's revenue model is centered around its vertically integrated operations, which allow it to control costs and optimize its supply chain from mining to finished product. Key revenue streams include the sale of bauxite to third-party customers, the production of alumina for both internal use and external sales, and the fabrication of aluminum products for various industries. Alcoa's financial performance is also influenced by aluminum market prices, operational efficiencies, and strategic partnerships with major industrial players. Additionally, the company invests in innovation and sustainability initiatives to enhance product offerings and meet the evolving demands of its customers.

Alcoa Key Performance Indicators (KPIs)

Any
Any
New Chart
New Chart
Provides insights into Alcoa's latest metrics or trends, highlighting areas of innovation, strategic shifts, or emerging challenges within the company.
Chart InsightsAlcoa's recent metric shows a significant drop, which aligns with the company's reported revenue decline due to lower prices and shipments in the Alumina segment. Despite this, Alcoa's earnings call highlights strong financial resilience, with increased net income and strategic debt management. The company faces challenges from U.S. tariffs and costs related to the San Ciprian smelter restart, but its joint venture formation and operational improvements suggest a focus on long-term stability and growth.
Data provided by:Main Street Data

Alcoa Earnings Call Summary

Earnings Call Date:Jul 16, 2025
(Q2-2025)
|
% Change Since: 11.55%|
Next Earnings Date:Oct 15, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance for Alcoa Corporation in Q2 2025. While there were strong safety records and strategic achievements like the Ma'aden sale and favorable tax rulings, the company faced significant financial challenges due to declining revenue, increased tariff costs, and operational disruptions in key segments. The call highlighted both positive long-term demand forecasts and immediate headwinds from tariffs and shipment delays.
Q2-2025 Updates
Positive Updates
Strong Safety and Operational Performance
No fatal or serious injuries reported in Q2 2025, with injury rates trending below 2024 benchmarks.
Strategic Divestiture
Closed the sale of a 25.1% stake in the Ma'aden joint ventures for $1.35 billion, including $1.2 billion in shares and $150 million in cash.
Favorable Tax Ruling
Successfully concluded a 5-year tax dispute in Australia with a favorable ruling, confirming no additional tax owed.
Positive Free Cash Flow
Achieved positive free cash flow of $357 million for Q2 2025.
Record Sales Volumes at Juruti Mine
Juruti mine on track to achieve record bauxite sales volumes in 2025.
Negative Updates
Revenue and Income Decline
Revenue decreased by 10% sequentially to $3 billion, and net income attributable to Alcoa fell to $164 million from $548 million in the prior quarter.
Impacts of Section 232 Tariffs
Increased U.S. Section 232 tariff costs on aluminum imports from Canadian smelters, contributing $95 million to quarterly expenses.
Challenges in Alumina Segment
Alumina segment adjusted EBITDA decreased by $525 million due to lower prices, higher production and energy costs.
San Ciprián Restart Delays
Reduced aluminum shipment outlook due to disruptions from a nationwide power outage, with full ramp-up delayed to mid-2026.
High Tariff Costs
Expected Q3 2025 tariff costs of approximately $215 million, with ongoing market volatility affecting pricing.
Company Guidance
During the Alcoa Corporation's second quarter 2025 earnings call, management provided updated guidance on several key metrics. They announced a reduction in the annual aluminum shipment outlook to 2.5-2.6 million metric tons due to disruptions at the San Ciprián smelter. Corporate costs for 2025 were revised down to $160 million, while interest expenses were adjusted up to $180 million. The company's return-seeking capital expenditure outlook was lowered to $50 million. For the third quarter, Alcoa expects a $20 million improvement in the Alumina segment due to lower maintenance costs and higher production, and an increase in the Aluminum segment's tariff-related expenses by approximately $90 million due to higher U.S. Section 232 tariffs. They indicated that current tariffs are impacting their operations, with a projected $215 million in quarterly tariff costs based on an LME price of $2,600 and a Midwest premium of $0.67 per pound. Alcoa also highlighted the receipt of Ma'aden shares and $150 million in cash from a joint venture stake sale, with the majority of cash proceeds to be used for taxes and transaction fees.

Alcoa Financial Statement Overview

Summary
Alcoa demonstrates strong revenue growth and operational efficiency improvements, resulting in better profitability metrics. The balance sheet is strengthened by lower leverage and improved equity returns. However, cash flow management poses a challenge with negative free cash flow growth.
Income Statement
72
Positive
Alcoa shows a strong revenue growth with a 7.9% increase in TTM compared to the previous year. The gross profit margin improved significantly to 39.7% TTM. However, net profit margin remains low at 6.8% TTM, albeit an improvement from the previous year. EBIT and EBITDA margins have both improved to 33.5% and 16.9% TTM respectively, indicating better operational efficiency.
Balance Sheet
68
Positive
Alcoa's balance sheet reflects a robust equity position, with an equity ratio of 39.9% TTM. The debt-to-equity ratio has improved significantly to 0.01 TTM, indicating lower leverage. Return on equity has improved to 14.8% TTM, showing better profitability. However, the high total liabilities pose a risk to financial stability.
Cash Flow
65
Positive
Operating cash flow has increased by 47.9% TTM, showing strong cash generation. However, free cash flow growth is negative, declining by 17.1% TTM, highlighting concerns over capital expenditures. The operating cash flow to net income ratio is 1.07, indicating efficient cash conversion, but free cash flow to net income ratio remains low at 0.40.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue11.89B10.55B12.45B12.15B9.29B
Gross Profit1.85B738.00M2.24B3.00B1.32B
EBITDA1.09B48.00M1.32B1.86B826.00M
Net Income60.00M-651.00M-123.00M429.00M-170.00M
Balance Sheet
Total Assets14.06B14.15B14.76B15.03B14.86B
Cash, Cash Equivalents and Short-Term Investments1.14B944.00M1.36B1.81B1.61B
Total Debt2.82B1.97B1.87B1.87B2.62B
Total Liabilities8.91B8.31B8.17B8.74B9.84B
Stockholders Equity5.16B4.25B5.08B4.67B3.31B
Cash Flow
Free Cash Flow42.00M-440.00M342.00M530.00M41.00M
Operating Cash Flow622.00M91.00M822.00M920.00M394.00M
Investing Cash Flow-608.00M-585.00M-495.00M565.00M-167.00M
Financing Cash Flow201.00M57.00M-768.00M-1.16B514.00M

Alcoa Technical Analysis

Technical Analysis Sentiment
Positive
Last Price31.86
Price Trends
50DMA
29.14
Positive
100DMA
28.78
Positive
200DMA
34.02
Negative
Market Momentum
MACD
0.70
Negative
RSI
60.46
Neutral
STOCH
94.08
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AA, the sentiment is Positive. The current price of 31.86 is above the 20-day moving average (MA) of 30.39, above the 50-day MA of 29.14, and below the 200-day MA of 34.02, indicating a neutral trend. The MACD of 0.70 indicates Negative momentum. The RSI at 60.46 is Neutral, neither overbought nor oversold. The STOCH value of 94.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AA.

Alcoa Risk Analysis

Alcoa disclosed 28 risk factors in its most recent earnings report. Alcoa reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Alcoa Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$3.10B25.7625.44%0.20%17.83%50.28%
72
Outperform
$8.31B8.2620.01%1.56%22.04%
70
Outperform
$2.13B20.0918.03%11.42%-49.21%
70
Outperform
$1.42B23.788.89%3.50%4.62%56.04%
68
Neutral
$2.02B31.317.93%-2.29%-48.13%
56
Neutral
$5.57B-25.79%-12.14%-4329.00%
44
Neutral
AU$1.51B-6.04-41.37%3.90%-3.45%-43.04%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AA
Alcoa
31.86
-0.65
-2.00%
CENX
Century Aluminum
22.82
7.66
50.53%
CLF
Cleveland-Cliffs
10.91
-4.35
-28.51%
KALU
Kaiser Aluminum
88.12
12.71
16.85%
USLM
United States Lime & Minerals
107.48
25.91
31.76%
CSTM
Constellium
13.81
-3.27
-19.15%

Alcoa Corporate Events

M&A TransactionsBusiness Operations and Strategy
Alcoa Sells Stake in Ma’aden Joint Venture
Positive
Jul 1, 2025

On July 1, 2025, Alcoa Corporation announced the closing of its sale of a 25.1% ownership interest in the Ma’aden joint venture to Saudi Arabian Mining Company, receiving approximately $1.35 billion in shares and cash. This transaction allows Alcoa to record a gain of approximately $780 million in the third quarter of 2025 and reflects the company’s strategy to unlock shareholder value while maintaining a stake in Ma’aden for future financial visibility.

The most recent analyst rating on (AA) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Alcoa Elects Directors and Approves Auditor Appointment
Neutral
May 13, 2025

On May 8, 2025, Alcoa Corporation held its Annual Meeting of Stockholders, where all 11 director nominees were elected for a one-year term. Additionally, stockholders approved the appointment of PricewaterhouseCoopers LLP as the independent auditor for 2025 and endorsed the executive officer compensation for 2024, reflecting continued confidence in the company’s leadership and strategic direction.

The most recent analyst rating on (AA) stock is a Buy with a $50.00 price target. To see the full list of analyst forecasts on Alcoa stock, see the AA Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 19, 2025